Are you seriously comparing the quintessential.com bubble site to a profitable [cnet.com] and innovative car company? Just because their stock price is increasing on opening day doesn't mean that they're about to burst.

For instance, take - Google's stock [google.com]. There were a multitude of pundits and "experts" claiming that their $100 IPO price levels were totally unsustainable. They looked pretty stupid when the price doubled in 6 months. Sure, Tesla is no Google, but don't imagine that their stock price is guaranteed plum

Obviously, there's a huge government conspiracy to make us think that people want "family cars". Heck, Wikipedia is claiming that a compact family sedan called the "Corolla" [wikipedia.org] is the best selling car of all time.

If it's got > 2 functional seats, I ain't interested.

Sucker - I'm not interested unless it only has one functional seat and zero doors.

For the immediate future, the S sedan seems like a niche product. Not too many people have $50K to drop on a vehicle that's really only good for a daily commuter (300 mile range and 45 minutes for a 'quick charge' make it impractical for long road trips). I'm not saying there's no market, I'm just pointing out some limitations (mostly the price - I think I can live with a 300 mile range).

Electric vehicles are awesome, and I'm glad that Tesla continues to innovate and improve. Hopefully they can invest th

What's the problem with a 300 mile range? I've never understood that. That's five hours of driving at 60 mph, which far exceeds what most family sedans will ever need. If I'm going to travel more than 300 miles I'm letting someone else (pilot, engineer, bus driver, etc.) do the driving for me. Even on my most ridiculous days at work I'm not driving more than two hours from home.

If my neighbors will cough up $70,000 for a Land Rover or H2 then I don't see that price point as an issue, either. Especia

And I need a yard of cement from time to time, but that doesn't mean that I have to own a cement mixer. If I owned an electric vehicle and needed to take that once- or twice-yearly long trip I'd rent a long-distance vehicle, the same as I'd rent a cement mixer. Even better is my neighbor's solution for the occasional need for a pickup. The parents bought it used a decade ago, now three of the kids split the insurance and the other stores it in his back yard. When any of the kids or grandkids need a truc

They are aware that they need sales. As I mentioned before, they have at one point turned a profit (though they aren't right now, as an anon pointed out). The co-founder of Tesla, Elon Musk [wikipedia.org] previously co-founded Paypal which was (is) quite profitable. I don't think that Musk needs to be schooled on how to make a business plan.

It really depends on how well they can market the roadsters

I would think it would depend on how well they can market their Model S since that will be their bread and butter starting

I don't think that Musk needs to be schooled on how to make a business plan.

While his previous business was successful, it depended heavily on two key aspects: the revenue stream came from taking "off the top" of what amounts to providing a simple service, and it depended very heavily on one key player for the majority of its revenue: eBay.

This is different. His company will be required to produce a physical good with a warranty, which will have to meet expectations and requirements. When PayPal began, there were no real precedents to meet because it was a fledgling market

No, we didn't. The Slashdot article was posted at 2:34 EST. The stock had already made its biggest gains by then. Plus, with all the negativity here, Slashdot is far more likely to depress the price than inflate it.

My guess is that the company weighed the merits of continuing to exist against the issues of giving up control. They've lost over $250MM over the last few years and are probably still looking at a few years of losses ahead of them; that money has to come from somewhere. It might as well be public shareholders.

I thought they got a big loan from the government at obscenely low interest rate for a venture capital startup? (It was the program intended as a giveaway to the failing Big Three but dressed up as a program to increase fuel efficiency, and Tesla apparently called their bluff.)

I distinctly remember them saying a few years ago they didn't want to go public with the company so they'd retain complete control.

That was before the economy imploded and Musk has now run out of cash to float the company on his own. The only choice for survival was to either attract private investment or a public offering. I'm sure Musk feels the latter is the lesser of two evils for maintaining control into the future. Once he rebuilds his fortune he can buy back enough shares to call the shots again.

With the IPO at $17, and with it now trading at $20.50, some 20% higher than the already-raised IPO price, it really is probably overpriced.

What makes TSLA an interesting business proposition (although not, for me, at $20+) is that if (and it's a huge "if") they can get production up and running in a timely fashion, they really do stand to reform the auto industry.

The old model - manufacturers sell to dealers, and dealers sell to end users, but the dealers are franchisees who actually have no real relationship with the manufacturer. Your GM dealer sucks? Your GM dealer's mechanic sucks? It all reflects poorly on GM, and what's worse (from GM's point of view) is that all the short-term gains made by shady dealers and overpriced service departments go to the dealer, not to GM. Dealerships are profit centers for the dealer, but often breakeven or even loss centers for the manufacturer.

Tesla's model is new to the auto industry: manufacturer sells direct to consumer, and also owns the distribution network and the service departments. That's nothing new in high tech: Apple's made a fortune using that model. The "Apple Store" gives a retail presence, but the guy at the Apple Store doesn't really care whether you buy the thing on the spot or go back home and buy it through the website.

Applying that model to cars is interesting - and potentially groundbreaking. In the case of the Big Three, the dealer networks were an albatross around the neck of the auto manufacturers. If Tesla's model works, Telsa won't need a network of thousands of independent dealerships, because the only function of the dealerships will be to provide test drives and occasional servicing. Dealerships will be profit centers, not loss centers, for the manufacturer.

"Their cars come in at about the cost of a Ferrari. How is that *not* overpriced for a car that cannot go as far as a Ferrari?"

Umm...where exactly can you buy a new Ferrari for under $100K? And with tax/green rebates feds and state are giving...less than that....?

I know the avg distance between charges for the Tesla is ab out 250mi or so...but I think you will have to spend significant more $$$ on a Ferrari or any other super car to get it to beat a Tesla off the line, etc...

It's not a major issue for 30% or so of consumers, and for a small car company, playing niches is just fine. For most consumers, the fact that it's a sports car with a sports car price-tag is a bigger issue than having to plug it in when they pull into their garage, especially since it takes less time to do that than it does to drive a mile out of their way to hit a gas pump.

Not that I blame them for doing sports cars first -- I mean, you need the torque for regen braking anyway, so why not recycle that for

Yeah, helicopter footage of the highway out of Houston stuffed with cars fleeing Hurricane Rita that had run out of gas, while Priuses chugged along merrily on the shoulders, was great marketing for the Prius.

As someone who just bought a used prius, I'd have to say that your insult is off base. At an AVERAGE of 48.5 mpg, this car doesn't suck. It is big enough for me an my wife, and enough space in the back to drag around groceries/skies/camping equipment/or mulch. As my drag racing days are behind me, what more do you/I need in a car?

I don't mean to completely debase the car, it's surely sufficient for many people; I'm just saying you can get a lot more for that level of money. Sticker on Priuses within 30 miles of me right now *start* at $22k. For less than that I can get a fairly well-equipped Mazda 6, an Altima, or even Toyota's own Camry.

Yeah, I gotta say, agreed. Our 2007 Prius has a lifetime average of 49.8MPG, meaning I have spent less than $3,000 on almost 60,000 miles in gas.

It actually has more space for cargo than the Camry, in all respects, largely as much as most station wagons. Driving from Seattle to Boise, it has enough power to easily cruise up the huge hill at Pendleton Oregon at 75mph (I actually have to turn cruise control off, because my wife doesn't like the corners being taken at that speed).

If Tesla's model works, Telsa won't need a network of thousands of independent dealerships, because the only function of the dealerships will be to provide test drives and occasional servicing. Dealerships will be profit centers, not loss centers, for the manufacturer.

So Tesla will not only have to fund cars, but also thousands of Tesla dealers around the world? I don't think that $200,000,000 is going to go very far in that case.

Tesla's innovative organizational structure won't be enough to save them if their cars are a flop, though - and sure, the Roadster is a cool car and could be construed as being ahead of the competition so far, but it's also expensive, the batteries suffer from massive depreciation, and the economy's not looking spectacularly hot right now. Moreover the regular automakers aren't really that far behind (a plug-in hybrid Prius would be a perfectly reasonable substitute for the normal-consumer-oriented version of the Tesla technology).

There's a lot of optimism priced into the stock right now. I wouldn't expect them to go out of business in the next couple of years or anything, and I might pick up a few shares if it gets down to $10-$12 or so, but a $22/share price sounds way too optimistic for my liking. I'd wait for the headline-buzz to fade a little before pouring too much money into it.

While that's true, the people who are at such a price point are largely unaffected by the current state of the economy. In fact, a large number of those people are likely seeing new profits at this time. Last I heard they are still back ordered by several thousand units.

While I too believe they are overvalued, I presume the price reflects what someone else already pointed out; they could be a game changer. This is likely further tempered by the fact they are pushing to enter a mid priced value point as well

Virtually every state in the union has dealership siting laws that stifle competition, and in particular, the sort of business model you speak of (i.e. an automotive analogue to the Apple store). When I was in the car business (aftermarket sales to parts departments) about 20 years ago, the carmakers had very limited options if they wanted to rescind a bad dealership's contract. There are limits on the number of manufacturer-owned franchises available, too, IIRC. The whole thing is a hugely rigged game in f

I'm not sure if you mean the "dealerships" by "local resellers", because I essentially bought my '99 car (that I got in about April '98, yes earlier than most cars change model year) online. It wasn't through a regular Mazda dealership.

Tesla's model is new to the auto industry: manufacturer sells direct to consumer, and also owns the distribution network and the service departments. That's nothing new in high tech: Apple's made a fortune using that model.

One difference is that Apple's exposure in a recall is limited to the replacement cost of a small household appliance.

It doesn't have to "service" anything.

Tesla has a $100K Roadster and a $65K Model S sedan in the works.

That implies a full-scale luxury dealer showroom and auto repair garage. Not a niche in the Galleria Mall.

So ultimatley the target market appears to be people with more money than sense; which obviously exists, but I doubt it's large enough to sustain a company like Tesla.

Right. Because if you've got tons of cash you're going to drive a Yaris because the TCO is low. Fark no. You're going to drive a nice ride. You can have sense, cash, and still want a high-end car. It's not an investment.

Right. Because if you've got tons of cash you're going to drive a Yaris because the TCO is low. Fark no. You're going to drive a nice ride. You can have sense, cash, and still want a high-end car. It's not an investment.

Which part of "If you can afford a new Merc, you can afford the gas to run it" is hard to understand?

If you can afford a new Merc, why would you buy an unproven electric car from a company which probably won't be around in five years just to save a few bucks on gas? Even you seem to agree that there is no rational justification for worrying about fuel economy if you're the kind of person who'd pay $50k for a Merc, yet you're claiming I said the opposite.

If you can afford a new Merc, why would you buy an unproven electric car from a company which probably won't be around in five years just to save a few bucks on gas?

Because you can afford to and don't mind taking the risk to have something that is on the cutting edge of technology. If I want proven, I'd buy a Toyota. I reserved a Model S because it'll be fast, combustionless, and around the same cost of a 5 series. Risky? Sure. But if I can afford the Model S, I can afford the risk.

If you can afford a new Merc, why would you buy an unproven electric car from a company which probably won't be around in five years just to save a few bucks on gas?

How about, besides saving "a few bucks on gas", you want to simply drive a more environmentally sound car, and are WILLING to be a first-adopter (paying a higher price) to help get rid of the companies like the one that has been ruining the Gulf of Mexico by spewing oil into it for 70+ freaking days with no signs of it stopping?

You could describe people who buy Beemers and Mercs as having more money than sense for not buying a Yaris in the first place.

The appeal of the Model S to these folks isn't going to be cost savings on fuel. It's going to be the performance of a high-torque electric motor. It may not beat the other options on the straightaway, but it will beat them out of the gate which is what a lot of people care more about since you rarely get to exercise your max speed what with the po-lice around.

The Tesla is not an economy car, it's a performance car. It doesn't have a super high top speed, but unless you're on a track you can't use that anyway. It does have kick-ass acceleration and superb handling, which can be used legally on the street. Compare using a Tesla for commuting to work and back to using a Ferrari, Lambo, or Merc; the Tesla wins in all respects.

Right. And because its an electric car, it brings "economy" along for the ride. Driving 250 miles on a couple bucks worth of electricity is hardly the typical "gas hog" which one typically associates with the performance class.

I'm sure that will be a factor for people who already own one when the price of gas starts to shoot up. But I think it's more than "green" is coming along for the ride. Buy a nice luxury car with kick-ass acceleration and be able to make a (barely plausible but hey) claim to being "environmentally conscious"? Take that, Joneses!

Because, clearly, I have nothing better to do than show off on Slashdot. I put money down on the Model S because I like the car, I bought stock in Tesla because I believe in the company. That's not flashy, that's just putting your money where your mouth is.
The disclaimer was simply to point out my bias.

They are in no way targeting the same market as the Yaris. They are currently selling the Tesla Roadster sports car, which has a base price of US$109,000.

The 50k Model S (which is not out yet) http://en.wikipedia.org/wiki/Tesla_Model_S [wikipedia.org] is targeting the BMW 5 Series market (528i = $44,550+ to 550i = $66,000+ MSRP) and when you run the numbers comparing them the Model S is vary cost effective.

You are correct. However, the S sedan does not target the Yaris market. Telsa's goal when they started was to make a $35,000 model and transform the auto industry. This is just a stepping stone. You should include the value of using electricity which could be drawn from renewable sources rather than fossil fuels.

Of course all of this hinges on if they can build a product that consumers want at a affordable price. Considering todays battery technology and the current prices of oil I am betting heavily against them.

The current prices of oil are immaterial to their long term value. Sure, there are people who are going to invest heavily in the IPO and try to turn a profit in the extreme short term (investors generally buy in for the long term. So, the real question is whether the cost of oil will increase significantly over the medium term (the next few years).

Considering todays battery technology

I have the same problem with this statement - there are way too many companies with a vested interest in developing better battery technology for the industry to

I think Warren Buffett said that as a rule companies which pioneered most revolutionary technologies, those which changed our lives in profound ways, didn't make money for original investors...
Especially in transportation (think airlines, car companies etc.)

Indeed, and Google is a classic case in point. It wasn't Altavista, Infoseek, Excite, or even GOTO (remember them, they invented bidded search ads), it was Google that came after and put together a very scalable and flexible architecture. They refined the standard IR algs, refined bidded ads, etc as well, but they weren't the first movers. Same goes for Ford, and I suspect Boeing (hello, Wright Brothers Airlines anyone?)

Its the person that gets the large scale infrastructure right that wins. What is the cor

Their cars run on DC motors (or at least get power from a DC source). Yet the company is named after a man who is acknowledged as the father of the alternating current (at least in the US).

Otherwise I think they have a fine product (although I cannot afford it) and I hope them well. Furthermore if the company name helps to make Nikola Tesla better known in this country, I think that would be great as I view Tesla as amongst the greatest scientists to ever work in the US.

No, like most modern high-powered variable speed motors, they're synchronous polyphase AC motors driven by a variable frequency drive.
One of the confusing issues in this area is that small motors of this type are referred to as "brushless DC" motors, while
larger ones are called AC motors driven by variable speed AC drives.

Close, but no: While synchronous motors are indeed most common in shipping vehicles today, Tesla, like AC Propulsion (from which Tesla licensed its technology) uses asynchronous AC motors.

One of the confusing issues in this area is that small motors of this type are referred to as "brushless DC" motors, while larger ones are called AC motors driven by variable speed AC drives.

The distinction is not one of size. Brushless DC motors are really synchronous AC in nature, with permanent magnets and zero field slip. These can be small (e.g. driving the fans in your computer) or large (the electric motor in a Prius). ACP and Tesla use asynchronous motors with field slip. These motors use no perma

Only One Thing I Dislike About Tesla Motors... Their cars run on DC motors (or at least get power from a DC source). Yet the company is named after a man who is acknowledged as the father of the alternating current (at least in the US).

Around the turn of the century Tesla concluded that it would be possible to transmit electrical power without wires. To optimise results, he chose to experiment at high altitude, where the air was thinner and therefore more conductive. As a result he ended up building a research laboratory in Colorado Springs where he conducted some of his most extraordinary experiments; tests that even to this day are shrouded in mystery. Tesla theorised that unlimited amounts of power could be transmitted anywhere on earth, without wires and with virtually no loss of energy. It is not clear exactly how he intended to do this, but right up until the end of his life he maintained that it was quite possible and that he only needed sufficient funds to make it a reality.

The funds however were not forthcoming, and Tesla was eventually forced to abandon his Colorado experiments in what was to become a recurrent feature in his life; no money or insufficient finance to pursue an idea . . . but a constant stream of new ideas.

Their cars run on DC motors (or at least get power from a DC source). Yet the company is named after a man who is acknowledged as the father of the alternating current (at least in the US).

Tesla had many accomplishments. While AC is an important one, so is radio communications, and the like. Some of his accomplishments are in the DC realm, at least due to having worked for Edison early in his career.

The last 10 years I've gone from knowing zilch about the financial industry to having a trust level of zilch. I've watched way too much fraud, IPOs of companies designed to dazzle investors and little else, and reckless greed that have combined to produce scores of great sounding ideas like this one. I simply have no way of telling whether this company stands a chance of creating a real product, or if they'll putter around burning through investor cash until everyone figures out It'll never work and it pr

AFAIK, they don't (can't?) "make" you hold the IPO stock.. If you sell within 30 days, however, you are likely not going to be allocated IPO shares again, at least for a while. Yes, I'm nitpicking the difference, but I do think it's significant, esp. if one is willing to risk missing future IPOs.

Yes i actually watched the "Booyah" (?) shouting guy on CNBC last week. He was going on about how this was expected to shoot through the roof in the initial IPO but as a company faced too many hurdles (competition, public interest, etc.) to justify holding on to the stock long term. He said get in early, then get out early. Also, apparently some brokers make you hold IPO stock for 30+ days. He said basically don't use them then.

And that's one to grow on.
(The more you know?)

You mean Cramer?

The same guy Jon Stewart completely ripped apart 15 months ago for causing just about everyone who listened to him to lose their money during the financial melt down of 2008-2009? And at the end of the interview the point seemed to have been made to just do the opposite of what Cramer says if you actually want to make money. He's the interview: Part 1 [thedailyshow.com] Part 2 [thedailyshow.com] Part 3 [thedailyshow.com].

That particular episode of Top Gear is (especially) derided as FUD. The car never ran out of batteries, they never recharged the car (just an off the cuff remark about it taking 16 hours to charge from their windmill(!?)), and the 'brake down' that they reported was a blown fuse (not a drive train one either, just a regular one like could and does happen in every car). The put the car into neutral and pushed it off the track to 'show what would happen if you ran out of charge', obviously you could say the exact same thing about running out of gas on the track.

To me, that really brought to light just how much the people at Top Gear are biased towards the cars that they like and against the cars that they don't.